An in depth analytical look
at the real estate market
in Houston and surrounding areas.

Wednesday, March 22, 2017

Houston housing remains a top pick of investors

By Katherine Feser

Houston continues to be a top choice among home investors, who are
drawn by low prices and strong returns compared with other markets, a
new report showed.Out of state investors, particularly from California, are eyeing
Houston, according to HomeUnion's 2017 Single-Family Rental Research
Report. The company is an online real estate investment management firm
based in California."Though losses in the energy sector caused Houston to experience a
drop in the number of new jobs in the market, the economy is recovering
nicely today," Steve Hovland, director of research at HomeUnion, said in
a report. HomeUnion projects a job growth rate of 1.3 percent in Houston compared to 1.7 percent growth nationally.Cleveland, Columbia,
S.C., and Memphis, Tenn., topped HomeUnion's list of metro areas with
the highest cap rates, which measures returns on single-family rentals
in the first year. Houston just missed the top 10 at No. 11 with a cap
rate of 6.9 percent."Cap rates in Houston, which measure the relationship between
purchase price and operating income for investment properties, are a
draw for investors," Hovland said. "Few other markets offer cap rates at nearly 7 percent, which is much higher than the national average."Single-family rents in Houston are projected to fall 0.4 percent to
$1,591 in 2017, according to HomeUnion. Rental vacancy is anticipated to
fall slightly to 7.3 percent.The median investment home price appreciated to $162,900 in the third quarter. "We're seeing a lot of
Houston and Dallas activity,"said Stacey Corso of HomeUnion. "I think
it's the low entry prices and strong rents and prospects for a
recovering economy." source: Chron.com